‘Massive’ Closures of U.S. Coal Plants Loom, Chu Says

The U.S. has an aging inventory of coal-fired power plants and many units might be closed before the end of the decade, Energy Secretary Steven Chu said.

“We’re going to see massive retirements within the next five, eight years,” Chu said today at a renewable-energy conference in Washington. “Much of our fleet of coal plants is 40 to 50 years old.”

President Barack Obama said last month the U.S. should eliminate tax subsidies for fossil-fuel production worth $4 billion a year so it can boost spending on renewable energy and cars that run on alternative fuels, such as electricity.

The U.S. also should require that 80 percent of its electricity comes from “clean” sources, such as wind turbines and nuclear reactors, by 2035, Obama said. Only coal-fired power plants that capture and store their carbon-dioxide emissions would be considered clean under Obama’s proposed standard.

“Clean-coal” equipment isn’t yet available for large power plants, said Chu, whose Energy Department is funding research into the technology.

The U.S. had 314 gigawatts of coal-fired generating capacity last year, which provided almost half the nation’s electricity, according to the Energy Information Administration. One gigawatt of coal-fired capacity can power more than 500,000 average U.S. homes, according to EIA data.

Mercury, Acid Rain

Regulations targeting mercury pollution and chemicals that cause acid rain and smog would trigger the coal-plant closures, not new rules from the Environmental Protection Agency on carbon dioxide and other greenhouse gases linked to climate change or Obama’s proposed clean-energy standard, Chu said. He declined to say how many gigawatts of coal capacity face closure.

The EIA predicts plants with 7.7 gigawatts of capacity will close by 2018. Cambridge, Massachusetts-based The Brattle Group, a consulting firm, said in December that 50 to 65 gigawatts of capacity may be closed by 2020 because of environmental regulations. Analysts at Zurich-based bank Credit Suisse Group AG said in September that about 60 gigawatts of coal capacity may be retired.

If Congress approves Obama’s clean-energy standard, coal’s share of the U.S. electricity market “will shrink a little bit until we develop those technologies that would use coal in a clean way,” Chu said. Nuclear reactors, natural gas-fired plants and renewable sources such as wind turbines and solar panels would expand to make up lost output from coal, he said.

It’s likely “smaller, older units” that burn coal “won’t be economic under new clean air standards,” said Luke Popovich, a spokesman for the Washington-based National Mining Association, which represents coal mining companies such as Consol Energy Inc. and Peabody Energy Corp.

New coal-fired plants with better pollution controls can be built to replace the closed units while carbon-capture technology is developed, Popovich said in an e-mail.

--Editors: Steve Geimann, John Lear

To contact the reporter on this story: Simon Lomax in Washington at slomax@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

The U.S. has an aging inventory of coal-fired power plants and many units might be closed before the end of the decade, Energy Secretary Steven Chu said. We re going to see massive retirements within the next five, eight years, Chu said today at a renewable-energy...